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Public
Improving the validity of public procurement
procurement research research
J. Gordon Murray
IDeA, Lisburn, UK 91
Received 19 September 2007
Abstract Revised 18 December 2007
Purpose – The purpose of this paper is to argue that the fundamental difference between private and Accepted 18 December 2007
public procurement, that of politicians, has been largely overlooked in public procurement strategy
and management research. It then aims to argue that existing public procurement research could be
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improved if greater attention were given to in research design to validity and the interface with
politicians.
Design/methodology/approach – The research is based on a critical literature review of public
procurement strategy and management literature, examining the methodologies used and roles of
politicians.
Findings – The findings suggest there is an in-built bias through over reliance on procurement
managers as the key respondents, tendency to focus on private sector procurement research attributes
and questions, and a tendency to focus on operational as opposed to strategic public procurement
decision making.
Research limitations/implications – The research suggests a need for greater understanding of
politicians’ engagement in public procurement strategy and management and the need for greater
triangulation in public procurement research.
Originality/value – The paper highlights how public procurement strategy and management
research can be improved to increase its validity. It explores the neglected area of the role of politicians
in public procurement.
Keywords Public procurement, Management strategy, Research, Politics
Paper type Conceptual paper
Introduction
The elevation of procurement to a strategic role has been the focus of considerable
attention since the 1990s. Most of the initial literature was set against the private
sector, and predominately manufacturing industry focussed (for example, Lamming,
1993; Brandes, 1994; Gadde and Hakansson, 1994; Speckman et al., 1994; van Weele,
1994), with comparatively little attention given to the public sector procurement
strategy and management. While the Public Contract Law Journal dates back to 1981
and Public Procurement Law Review to 1992, both had sit within the legal and
regulatory disciplines, it is only in the last decade that public procurement strategy and
management has, however, been recognised as different from that of the private sector
and developed into a research discipline in itself with its own biennial international
conference (Thai et al., 2005; Piga and Thai, 2007), journal, and international research
study on public procurement (Knight et al., 2007a, b). International Journal of Public Sector
This paper illustrates that existing public procurement strategy and management Management
Vol. 22 No. 2, 2009
research may be myopic, suffering from Cox’s (1997, p. 29) “Tyranny of Experience”, pp. 91-103
q Emerald Group Publishing Limited
0951-3558
The views expressed are those of the authors and not necessarily those of IDeA. DOI 10.1108/09513550910934501
IJPSM paraphrased as assuming that the research methodologies adopted for private sector
22,2 procurement will be appropriate, without adjustment, in the public sector. If that is the
case there may be a need to improve the validity of existing public procurement
strategy and management research approaches.
The paper rests on the platform that at national, supra-national and international
levels public procurement sits within legislative, administrative and judicial
92 frameworks and much of those frameworks have been set by politicians. At that
level, through the development of legal regulation and establishing its precise contents,
the influence of politicians on public procurement policy is pervasive. Clearly at the
public procurement policy level, there is a fundamental and accepted difference
between public procurement and private sector procurement.
However, given that fundamental difference between public procurement and
private sector procurement, the paper argues that, at the level of the organisational
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strategy and management, the fundamental difference between private and public
procurement has been largely overlooked in public procurement research; that of the
voice of democracy, politicians, a major stakeholder in public procurement (Murray,
1999, 2007). As a consequence, there is little understanding of politicians’ views, even
though Ellram and Carr (1994) advocated that research would be of benefit, which
compares procurement’s view of itself with that of top management. Furthermore, the
paper argues that research claiming to be on strategic public procurement cannot be
considered strategic if it leaves out the role of politicians; local, regional and national.
The paper therefore discusses why a political perspective is important, suggests that
the gap in research has arisen as a result of researcher myopia leading to bias, and
makes recommendations both for improving the validity of public procurement
strategy and management research and for future research.
Democratic accountability
At national, supra-national and international levels public procurement sits within
legislative, administrative and judicial frameworks and much of those frameworks
have been set by politicians. At that level, through the development of legal regulation
and establishing its precise contents, the influence of politicians on public procurement
policy is pervasive. Clearly at the public procurement policy level, there is a
fundamental and accepted difference between public procurement and private sector
procurement. However, at the national, regional and local levels, the public sector
works within a narrower framework of democratic governance strategy and
management; local people exercise their right to determine how and by whom they
should be governed through the “ballot box”. In turn, those elected not only have a
representative advocacy role, but also take on the responsibility of being
democratically accountable to the electorate for the decisions made “under their
watch” (Hill, 1974; Mulgan, 2006; Stoker, 2006; Murray, 1999, 2007; Caldwell et al., 2007, Public
pp. 149-59); at its most visible this can mean a change of government or a politician procurement
having to resign when things go badly wrong.
In the past the public sector delivered most of its services through direct service research
provision; the client and provider were both public servants. However, politicians have
had a shift to what Osborne and Gaebler (1993) refer to as “steering not rowing”.
“Steering” relates to policy and ends, while “rowing” is concerned with the means of 93
service delivery. Elected “members steer” in determining outcomes to be achieved,
what public money is to be raised and on what public services it is to be spent (Lyne,
1996, pp. 1-6), unshackled of defining service outcomes through the constraints of their
own workforce, while “officers row” in recommending the best-fit delivery means. This
has manifested itself in recent times as a shift to a mix of service providers (Donahue,
1989; Walsh, 1995); sometimes the public sector, sometimes the private sector and
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sometimes the third sector. The UK best value regime considers this choice of service
delivery options to be procurement decisions (DETR, 1999) and they are recognised
within procurement literature as the “make or buy” decision (Baily et al., 1994,
pp. 187-200; Saunders, 1994, pp. 128-34; van Weele, 1994, p. 18; McIlvor, 2005, pp. 7-8).
These decisions are truly strategic procurement decisions (Cox and Lamming, 1997;
Ramsay, 2001), although previous research (Murray, 1996; de Boer and Telgen, 1998;
White and Hammer-Lloyd, 1999; Ramsay, 2001) suggests that procurement
professionals are unlikely to be included in these strategic procurement decisions.
Phillips et al. (2007) recognised, in their review of governance, that politicians were
likely to be held accountable for public procurement although “the missing link” of
good governance reflecting democracy in procurement strategy was not explored.
Equally, in their evaluation of the procurement processes within the international
research study on public procurement, Caldwell et al. (2007, p. 156) recognised that: “. . .
public bodies and their procurement are subject to the particular need of elected
representatives who have to be concerned with image and votes”, yet then failed,
through their evaluation, to report on any engagement of elected representatives in the
actual procurement process. As evidenced later, the predominant informant of existing
public procurement strategy and management research rarely, if ever, considers
politicians perspective as opposed to that of procurement managers, even though those
same officers are considered to be ignored from many of the strategic decisions.
Logically, if elected representatives are democratically accountable for public
procurement decisions, research, to be robust, needs to consider politicians’ perceptions
as opposed to only those of procurement managers who are rarely involved in the
strategic decision-making process.
the objectives of the procurement strategy, yet of the little comparative analysis of
politicians and procurement managers’ priorities, Murray (2001a) demonstrated a lack
of correlation. That being the case, it is quite possible that procurement may be
pursuing goals at variance to those of their political leaders. For example, while there
has been considerable public procurement research devoted to the pursuit of
socio-economic goals (such as Murray, 2000; Coggburn and Rahm, 2005, pp. 23-53;
Bolton, 2006, pp. 193-217; van Valkenburg and Nagelkerke, 2006, pp. 250-73; Erridge
and Henningan, 2007, pp. 280-303; Walker et al., 2007) and collaborative procurement
(Baker et al., 2007, pp. 14-44; McCue and Prier, 2007, pp. 45-70), apart from Murray’s
(2001a) tripartite survey and his case study (Murray, 2001b), setting out that it was
only through consulting and gaining the confidence of politicians that ownership was
gained of a procurement strategy, there has not been any empirical research to
establish that those priorities, on a case-by-case basis, are shared by the corresponding
politicians. It may therefore be that procurement managers are pursuing dysfunctional
strategies. While these scenarios are hypothetical, in the absence of research taking the
views of an array of key actors, and primarily those of politicians, how can it really be
known what the areas of increasing significance in the public sector are and how the
academic community really make the maximum contribution in solving the problems
of the future.
On a related theme, Thai and Drabkin (2007, p. 99), in a single case discussion,
which also appears to have lacked politicians’ input, found that US Federal
Government felt constrained by the lack of expertise of procurement managers to
address the wider political issues:
In the US Government there is a constant tension between a desire to divorce socio-economic
programmes from the businesses process of purchasing and the desire to achieve laudable
national objectives by both Congress and the President through the purchasing process. In
many case, the government’s acquisition workforce lacks the technical expertise to
understand the implications of the socio-economic objectives and its impact on the product or
service being acquired and the terms and conditions for the goods or services.
Discussing the international research study on public procurement’s findings,
Callander and McGuire (2007, p. 315), in the context of changes in training demands,
while considering that “it is also apparent from the cases that overt and covert political
demands, which are typical of the public sector, add an additional level of complexity
to public procurement compared to the private sector” made no recommendations for
political skills training or engagement with politicians or for the development of Public
politicians’ procurement skills. procurement
Procurement strategy must be aligned with those priorities set by politicians
otherwise procurement risks being dysfunctional. While public procurement strategy research
and management research espouses the pursuit of particular procurement strategies, it
is rarely, if ever, within a context of understanding political priorities. Equally, little is
known about politicians’ expectations regarding competences required of future 95
procurement managers.
Principal-agent relationship
Significant literature has been devoted to the principal/agent relationship in
procurement strategy and management research (for example, Donahue, 1989)
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however, that research is presented from the buyer/supplier relationship and the need
of the buyer, as the principal, to minimise the risks posed by the agent. Little attention
has been given to the reality that, within public procurement, procurement managers
take on the role of agent for elected representatives. Soudry (2007, pp. 435-6) recognised
this principal/agent relationship in a paper on how accountability systems have been
put in place. He identified that, among the possible risks, procurement managers may
show apathy towards politicians’ preferred outcomes or even overriding of the
principals preferences:
It follows that in the absence of effective control mechanisms, procurement officials are likely
to involve some personal preferences, derived from their primary interests, career prospects,
social contacts, monetary reward or merely aversion to effort, when making procurement
decisions . . . The difference between the case of public and private agents however lies in the
availability and quality of potential control mechanisms . . . in the case of public procurement
exercising control over agents is much more complicated . . . there is no homogeneous group
of principals to monitor the actions taken by the agent. Instead there is a diverse collection of
principals, composed of interests represented by pressure groups influencing politicians and
the general public (Soudry, 2007).
While Michael Barber (2007, pp. 312-13), reflecting on his time as adviser to former UK
Prime Minister, Tony Blair, viewed the Civil Service as presenting a constraint:
All to often though constraint . . . is through other means – excessive risk aversion,
exaggeration of the likely difficulties, refusing to believe that what politicians have said they
want is what they really want, slowing down or watering down implementation and, last but
not least, simple incompetence . . .
An alternative, but complementary perspective, related to the principal/agent
relationship is that of respective roles of “knaves, knights, pawns, and queens” (Le
Grand, 2003). Knaves pursue their own interests, knights have no self-interest and are
motivated to help others, pawns are moved or controlled by others, and queens are
those with the most power. When public procurement research focuses on the
procurement manager, in the absence of the political dimension, it is affectively placing
procurement managers in the position of a knight but without a leader. However, in the
absence of a leader, is arguing that procurement managers therefore have the role of
queens, beyond the control of others? However, the critical factor within the public
sector is the supremacy of the democratic voice legitimised through the ballot box,
IJPSM which being the case, as implied by Soudry and Barber, procurement managers could
22,2 actually be knaves!
Therefore, research has been skewed and failed to address how procurement
managers behave as agents of politicians. Do politicians view procurement as a major
risk, and how do politicians protect against asset specificity, moral hazard, first mover
advantage, etc.
96
Performance management
An effective performance management approach helps both the organisation and the
individual understand what is involved (Moran and Avergun, 1997) while usefully
embedding change (Johnson and Scholes, 1993, pp. 398-401). To be effective though a
procurement performance management systems must focus on “measuring the correct
things” (Speckman et al., 1994; Leenders, 1998; White and Hammer-Lloyd, 1999).
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These perceptions, which appear anecdotal, view politicians as only being engaged in
discussions on the conditions of contract, contract awards and purchasing initiation,
while concerned about image; together with public accountability being viewed as a
hindrance, present a negative and very narrow perspective, yet there does not actually
appear to have been any research into the actual roles and potential roles of politicians
in public procurement strategy and management. Indeed, such perceptions of
politicians’ engagement with public procurement do little more than undermine the
very democratic process so fundamental to public procurement and highlight the need
for a wider understanding of how public procurement fits within democratic
governance.
Ironically, Murray (2007) demonstrated, from a small number of action learning
research projects, that, within UK local government, politicians, in collaboration with
chief officers, exhibited an enthusiasm and appeared to have the capabilities to be
engaged in strategic procurement management, specifically, determining the corporate
procurement strategy and mapping the procurement portfolio; challenging the desired
procurement outcome; challenging procurement delivery options; supplier selection
and contract award; and, post-contract management and review.
by testing the perceptions of a wide range of actors for conflicting and supporting
evidence. This issue appears to be a key weakness of procurement case study research
yet is not discussed at all in an article considering purchasing and supply management
case research methods. A parallel article by Batenburg (2007, p. 182) in the same
special issue on research methods, acknowledges that “the organisational decision to
adopt e-procurement is frequently taken by boards and managers” yet when
discussing the merits of quantitative research in purchasing and supply management,
he does not argue that research should consider that wider decision-making unit, for
example, those board members and managers.
van Weele (2007, p. 205) suggests that the single respondent bias has a simple
justification, namely, “when it concerns research in the purchasing and supply chain
management domain, it is usually easiest to use purchasing managers as a prime
source of information”.
A bias in empirical research leads to consequential weakness in literature reviews.
Therefore, for example, when Zheng et al. (2007) look at the future of purchasing and
supply management, including the public sector, they review the literature, but if the
available literature has left out one of the key actors, their literature review has a
built-in bias, which in turn suffers from the pitfall that they exclude any reference to
the political aspects of public procurement. We therefore end up with key political
issues, such as, market shaping, contestability, shared-services and third sector
commissioning being overlooked through no fault of those reviewing the literature. A
second potential limitation on existing public procurement research is that of making
use of literature reviews without critically reviewing the methodologies behind the
literature for weaknesses and omissions.
A further potential reason is that public procurement strategy and management has
tended to suffer from the “Tyranny of Experience” (Cox, 1997, p. 29), paraphrased as
assuming that the research mythologies adopted for private sector procurement will be
appropriate without adjustment, in the public sector, this is illustrated in that the scope
of the international study of public procurement was confined to the operational
aspects of selecting potential suppliers, contracting, ordering, expediting and
evaluating suppliers, and evaluating purchasing (Knight et al., 2007b, p. 6) – these
are traditional private sector approaches to procurement research and yet fall short of
addressing the fundamental distinguishing feature of public procurement, the political
dimension. A third potential limitation of existing public procurement research is
therefore its tendency to focus on traditional, private sector procurement aspects as Public
opposed to fully exploring the uniqueness of public procurement. procurement
Snider (2006, pp. 275-6) provides a further possibility:
research
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procurement community in procurement-related publications, the principal audience of which
are members of that same community . . . basic procurement texts indicate that the field
essentially defines itself in a way that excludes it from participation in a major activity of any 99
organisation determination of need that may result in a procurement action. Through such
texts, procurement professionals learn to think of their field in a way that discourages them
from participating in strategic decisions and thus acting as organisational and institutional
leaders.
Therefore, a fourth potential limitation of existing public procurement strategy and
management research approaches, paradoxically is its focus on operational
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